Ireland fails to deliver broadband

18 Mar 2004

A report from the Oireachtas Committee on Communications, Marine and Natural Resources, which is due out next week, is aimed at addressing the reality that the introduction of broadband has been an abysmal market failure.

It is understood that the report will set down guidelines on how Ireland should have 5Mbps broadband in every home by 2006, increased to 10Mbps by 2008.

Despite claims of victory following the introduction of policy directives over the past year by Communications Minister Dermot Ahern TD, with the result that more than 100,000 people use broadband and flat-rate internet access services, the reality is that we are still a long shout from 5Mbps to every home by 2005, the Government’s original target or 5Mbps by 2006, the new one. “DSL is simply not broadband. At this rate we won’t get 5Mbps by 2056,” a source close to the committee revealed.

The report, according to sources, will set down an even further-reaching vision for broadband introduction in Ireland that takes into account not only connectivity but also the importance of broadband on key areas of a properly functioning society in the 21st century in terms of health, education and the environment. A source close to the broadband process explained: “This policy document could well be the most defining report that will be written about Ireland in the 21st century.”

For example, included in the document will be a recommendation that the Department of the Environment and local councils in future must only approve planning permission on construction developments that include broadband connectivity in the same way as electricity and water are judged. “In other words, from here on in broadband will be regarded as a utility,” the source added.

The Joint Committee on Communications, which is chaired by Cork Fianna Fáil TD Noel O’Flynn, is a cross-party committee that includes deputies and senators from most of the key political parties, including Fianna Fáil, Fine Gael, Labour, the Green Party and Sinn Fein. The 200-page report is the result of six Oireachtas Committee meetings held last year that saw presentations from 47 community, industry and state groups including the Atlantic Technology Corridor, the Southern Health Board, the Commission for Communication Regulation, Microsoft, Hewlett-Packard, IBEC and Cisco, to name but a few.

“At present there is no true cross platform to shake up the incumbent’s market. Local loop unbundling has failed. Can the blame be laid at the door of the incumbent if there are other platforms such as cable and wireless? For example, the decision by NTL and Chorus to halt investment in cable. If they had continued they could have shaken up the incumbent’s market as witnessed in other European countries,” the source said. “A key attribute of this report will be that the so-called last mile will from here on in will be regarded as the first mile that needs to be addressed going forward.”

Among the recommendations contained in the report will be the need to appoint a Minister of State with cross-departmental responsibilities in areas such as health, the community, enterprise, education as well as communications to ensure action is being taken. Moreover, key action will need to be taken in terms of future-proofing connection technologies for the country.

Another aspect of the report, one that already appears to have swung into action, is the creation of local co-operatives in regional areas that would work closely with internet service providers to deliver wireless, fibre or satellite broadband to that region. Last week, Ahern unveiled a €25m investment plan and invited proposals from local community groups interested in making this happen. Other aspects such as a €15m levy on the industry to enable broadband to schools and tax incentives to businesses enabling teleworking are also being acted upon.

Presenting to the committee was the secretary general of the Department of Communications, Brendan Tuohy, who addressed the investment path of the Government as well as the market failure of broadband so far. He said: “What we have experienced in recent years is a market failure or limitations of the market. When we liberalised the markets we believed the private sector would drive investment and provide the infrastructure upfront. It has not happened because there has been a shortage of capital in the sector.

“Grass is to an agricultural economy what broadband is to the new economy. It is the basic bedrock. You cannot have the new economy if you do not have broadband. ADSL is an introductory technology. The Government objective is to hit 5Mbps. Everyone accepts that it is going to happen but the issue is how quickly we do it. We are in a chicken and egg situation. The industry will provide broadband when the demand is there but the demand will not be there until the infrastructure and services are there,” Tuohy said. Highlighting how Sweden is investing €5bn in rolling out broadband, Tuohy estimated that Ireland would need to invest €1.95bn to achieve 95pc total broadband coverage of the country.

Another presentation was from Microsoft Ireland general manager Joe Macri who recommended partnership between the Government and the broader ICT sector, including hardware and software vendors and communications firms to enable true citizen access. Macri identified six economic benefits from the rollout of broadband to a nation. “These include gross domestic product growth; business growth, whether new or relocated; promotion of jobs in both the high-tech and the traditional sectors; increased tax base facilitating business, independent of location; and the extra bandwidth facilitates increased network security. Those are very clear benefits from the deployment of broadband,” he said.